ESI and Cognex Reach Settlement Agreement Over Patent Infringement Dispute

Business Wire via NewsEdge Corporation : PORTLAND, Ore.--(BUSINESS WIRE)--Nov. 16, 2004--Electro Scientific Industries Inc. (NASDAQ:ESIO) today announced it has entered into a settlement and license agreement with Cognex Corporation to resolve the lawsuit filed by Cognex against ESI in February 2001 alleging that ESI infringed Cognex's U.S. Patent No. 5,371,690. Under the settlement agreement, Cognex has granted ESI a non-exclusive license to the patent, which covers machine-vision technology, as well as certain covenants not to sue under various other patents related to surface-mount equipment.

In connection with this settlement, ESI will record a charge to operations of $1.8 million in the second quarter of fiscal 2005. ‘‘We are pleased to have settled this dispute and we are moving forward with our focus on providing world-class vision solutions to our customers and the marketplace,’‘ noted Nick Konidaris, ESI's president and chief executive officer.

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About ESI

Electro Scientific Industries, Inc. (ESI) is a pioneer and leading supplier of world-class production laser systems that help its microelectronics customers achieve compelling yield and productivity gains. The company's industry-leading, application-specific products enhance electronic-device performance in three key sectors -- semiconductors, components and electronic interconnect -- by enabling precision fine-tuning of device microfeatures in high-volume manufacturing environments. Founded in 1944, ESI is headquartered in Portland, Ore. More information is available at www.esi.com.

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